Nearly a quarter of the 123 new entries the Bureau of Industry and Security will add to its Entity List this week are Chinese suppliers that the agency named in private red-flag letters to U.S. companies earlier this year.
A new rule issued by the State Department last week will finalize an exemption for defense trade between the U.S., Australia and the U.K., potentially removing export control barriers for a range of items that had previously faced strict license requirements under the International Traffic in Arms Regulations. Australia and the U.K. said the exemption and other AUKUS changes are expected to lift restrictions on billions of dollars worth of exports each year and eliminate hundreds of export licenses once the “license free” trade begins next month.
The Bureau of Industry and Security this week fined a Pennsylvania electronics business and its Hong Kong affiliate $5.8 million after the company voluntarily disclosed and admitted to illegally shipping controlled technology to China, including to military research institutes on the Entity List. The company, TE Connectivity Corporation, had “knowledge or reason to know” that the shipments violated U.S. export controls, BIS said, adding that its employees in China hid the true end-users and bypassed the company’s denied-party screening process.
The Bureau of Industry and Security on Aug. 13 completed an interagency review for an interim final rule that could place new export controls on emerging and advanced technologies in coordination with “international partners.”
A new compliance note released by the Bureau of Industry and Security this week reveals the types of export violations that universities are most commonly disclosing to BIS, what led to those violations and the steps the academic institutions took to improve their compliance programs. The agency also issued a set of resources it said universities should use for compliance, including lists of risky parties maintained by both the government and outside organizations.
Russian-German national Arthur Petrov was extradited to the U.S., making his initial appearance in court Aug. 9 for allegedly committing export control violations, smuggling, wire fraud and money laundering, DOJ announced. Extradited from Cyprus, Petrov was charged for his part in a scheme to ship more than $225,000 worth of U.S.-sourced microelectronics to companies supplying weapons to the Russian military.
A new set of export controls on U.S. persons activities and other transactions could require “dramatic expansions” to some companies’ internal compliance programs, Akin Gump said this month, including additional compliance training, end-user certifications and greater due diligence of suppliers and customers.
U.S. export controls are blocking Huawei's access to evidence that it needs to prepare for its upcoming trial on racketeering, trade secret theft and other charges (see 2002130045), the Chinese technology company said in a court filing last week.
A recent federal district court ruling limiting the U.S. anti-smuggling statute to physical goods won't affect export control enforcement efforts on data and other intangible exports sent digitally across borders, lawyers said in interviews. Although the U.S. District Court in Kentucky said a statute barring the unlicensed export of certain merchandise, articles or objects didn't apply to an email with magnet schematics sent to Chinese manufacturers (see 2407290046), lawyers noted that U.S. export control agencies have their own, specific enforcement authorities to regulate those digital transmissions.
Trade groups, lawyers, investment firms, technology companies and foreign governments suggested a range of changes to the Treasury Department’s proposed outbound investment rules (see 2406210034), echoing calls last year for more clarity surrounding the due-diligence steps that will be required of deal-makers and warning that the U.S. risks chilling a broad range of U.S. ventures in China (see 2310050035). Several commenters also urged the Biden administration not to finalize the new prohibitions without similar buy-in from allies, with at least one group suggesting the U.S. is further from coordinating the rules among trading partners than it has let on.